Building Chaos: An International Comparison of Deregulation in the Construction Industry

Building Chaos: An International Comparison of Deregulation in the Construction Industry

Building Chaos: An International Comparison of Deregulation in the Construction Industry

Building Chaos: An International Comparison of Deregulation in the Construction Industry

Synopsis

One only has to walk around almost any major city in the industrialized economies of the world to see how well the construction industry is doing. This collection draws on international comparisons from the main industrialized countries in a key field--the construction industry.

Excerpt

Gerhard Bosch and Peter Philips

the focus of our studies

Jack be nimble! Jack be quick! Such advice is the order of the day for construction companies exposed to a world of intensified competition. This also is sound advice for many construction workers, who may face the prospect of moving from employer to employer and even from occupation to occupation over their work lives. However, in this brave new world of rapid response and impermanent specialization on the part of both firms and workers, when is flexibility a supple and fluid response to changing circumstances; and when is it a frightened and chaotic bouncing from one crisis to the next? How can firms accumulate intellectual and physical capital, suitable to the problem at hand, if the firm must be ready to re-gear for an entirely new and unknown problem in the very near future? Once acquired, how can the accumulated human capital be retained in the face of fluctuating work? How can workers acquire the human capital specific to the problem at hand if the problem keeps switching? Finally, even with a valuable stock of skills, what allows the worker to remain in the construction industry if it offers only uncertainty and insecurity? in short, in the face of turbulent and unreliable demand, how can the associated risks be mitigated so that both human and physical capital can be accumulated, experience can be gained, and the problem at hand can be done efficiently and productively?

The construction industry has had to be nimble and quick throughout its modern history. the construction process is an inherently turbulent process, with the turbulence of production rooted in the fact that construction products are durable goods susceptible to postponable demand. Demand is postponed each time the business cycle turns down. Although construction products are durable, they are neither easily stored nor easily transported. a non-storable, non-transportable durable good is especially sensitive to the business cycle. Unwanted buildings cannot be shipped elsewhere where demand is still vibrant. Furthermore, buildings and roads are difficult to stockpile in anticipation of future demand. Thus, the nature of the product prevents it from smoothing out the peaks and valleys of demand. As outdoor work, construction is also subject to seasonal swings, which add to the turbulence of the industry. Since construction provides geographically specific products, uneven development by region

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